The proposed national budget for the fiscal year 2025-26 has been met with cautious approval by leading trade bodies, who praised its intent but flagged serious concerns about its implementation.
While acknowledging the Finance Adviser's effort to address inflation, unemployment, and investment stagnation, the business groups said the budget lacks a clear and actionable roadmap to achieve these critical goals.
They shared their reactions through statements issued following the budget proposal on Monday.
The Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) said that preparing the proposed budget was a "bold undertaking" by the Finance Adviser given the backdrop of numerous economic headwinds.
These include shrinking export markets due to global inflation, sluggish domestic investment trends, elevated bank lending rates, persistent geopolitical tensions, and Bangladesh's upcoming transition from least developed country (LDC) status by 2026.
On the revenue side, MCCI warned that "implementing the budget will be highly challenging" and stressed the need for deep structural reforms.
"Effective budget implementation will require not just improved budget management but also significant reforms in tax policy, automation of the tax system, reduction of systemic revenue losses, and strengthening the capacity of the tax administration to provide proper services to the public," the chamber stated.
The MCCI also expressed deep concern over the prevailing investment climate, noting that investment has dropped to its lowest level in a decade-just 29.38 per cent of GDP in FY 2024-25.
"This stagnation in investment has led to reduced employment opportunities and an increase in the number of people living in poverty," it said.
Bangladesh Chamber of Industries (BCI) President Anwar-Ul-Alam Chowdhury (Parvez) criticised the budget for putting too much emphasis on revenue collection, especially through corporate and personal taxes.
"This budget relies excessively on corporate taxes and personal taxes, but due to systemic limitations, the government's revenue income remains low," he said.
He noted a glaring gap in the budget: the lack of any concrete strategy to expand the tax base.
"There is no indication in the budget of how revenue will actually increase. We do not see any steps to widen the tax net," he added.
Mr Chowdhury acknowledged that while the budget aims to reduce inflation, create a business-friendly environment, and boost employment, "achieving these goals will be challenging."
Business Initiative Leading Development (BUILD) said the proposed budget lacks specific measures to incentivize private sector investment at a time when it is crucial for growth.
While it appreciated the long-term projections laid out in the budget, some extending to 2030, the organisation warned that present challenges must be addressed first.
These include Bangladesh's LDC graduation transition, declining agricultural growth, a falling investment-to-GDP ratio, and growing uncertainty due to potential reciprocal tariffs from the USA and non-tariff barriers from neighbouring countries.
BUILD also criticised the increase in advance tax for commercial importers from 5.0 per cent to 7.5 per cent, stating it would disproportionately hurt SMEs.
"Most SMEs buy their raw materials from commercial importers. The increased tax will directly impact production costs," said the trade body.
The Bangladesh Frozen Foods Exporters Association (BFFEA) described the budget as "pragmatic and time-befitting," praising its focus on meeting basic needs and improving living standards.
However, BFFEA President Tariqul Islam Zaheer said the frozen shrimp and fish export industry has been struggling with persistent losses due to external market disruptions and needs urgent support.
He urged the government to reduce the 1.0 per cent tax at source on exports to 0.25 per cent, aligning it with what the leather sector enjoys.
"We also request the government to raise the cash incentive on shrimp exports to 10 per cent to help this sector survive and grow," he added.
The International Business Forum of Bangladesh (IBFB) welcomed the budget's effort to maintain macroeconomic stability amid global and domestic uncertainties but expressed concern over its lack of transformational ambition.
"The absence of transformative reforms, private sector engagement, and a credible roadmap to inclusive growth makes this budget a missed opportunity," said the organisation.
The IBFB called for bold decisions anchored in structural reform, public-private partnerships, and good governance to help Bangladesh remain competitive in the post-LDC era.
"For Bangladesh to achieve sustainable development and global competitiveness, the government must go beyond incremental change," the IBFB added.
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